Fears about the costs of a euro break-up or a massive bail-out for Rome pushed up the borrowing costs of governments across Europe. Most significantly, there was a sharp rise in the gap between the borrowing cost for Germany – the euro’s strongest member – and other countries.

The gap or “spread” between French and German bonds yesterday hit 1.46 percentage points — the highest level for almost 20 years and three times the gap recorded a year ago — as the borrowing cost for France reached 3.179pc.

The close relationship between France and Germany is regarded as the bedrock of the EU’s political and economic co-ordination. A widening gap would heighten fears for the entire European project. Belgium and Spain also saw “spreads” over German borrowing costs reach near 20-year highs.

The French central bank warned that growth would grind to a halt in the final three months of the year, after just 0.1 per cent growth in the three months to September. The government had already announced more austerity measures to shrink the debt pile, which is forecast to reach 87 per cent of GDP this year.

The French stock market fell by more than 2 per cent yesterday. The cost of Spanish government borrowing rose back towards unsustainable levels, at 5.7 per cent. Markets believe anything above 6 per cent puts a country in the danger zone. Rates above 7 per cent have forced Greece, Ireland, Portugal and Italy over the brink.